By B. Hamilton
Arizona, as part of a coalition of states is suing Google in an antitrust case challenging the company’s control over its Android app store.
Google is facing a series of major antitrust cases, including a suit that the Justice Department and 14 states filed in October, focused on Google’s efforts to dominate the mobile search market; one from 38 states and territories filed in December, also focused on search; and a third suit by 15 states and territories related to Google’s power over the advertising technology.
As Big Tech continues to flex its monopolistic powers regulators have attempted to rein in the search giant in Arizona. State Rep. Regina Cobb had hoped to help consumers save money and innovators compete in the tech market this past legislative session. Rep. Biasiucci had thrown his support behind Cobb’s bill, which would have allowed app developers to avoid what the two lawmakers call “devastating” fees imposed by big tech monopolies.
That bill died an untimely death.
The heart of the lawsuit centers on Google’s exclusionary conduct which substantially shuts out competing app distribution channels. Google requires that app developers, that offer their apps through the Google Play Store, use Google Billing as a middleman. This arrangement forces app consumers to pay Google’s commission— up to 30 percent— on in-app purchases of digital content. This commission is much higher than what consumers would pay if they could choose from one of Google‘s competitors instead. The lawsuit alleges that Google works to discourage or prevent competition, violating federal and state antitrust laws.
When Google launched its Android OS, it originally promised to keep it an “open source” platform. The lawsuit alleges Google did not keep that promise. By promising to keep Android open, Google successfully enticed manufacturers (such as Samsung) and operators (such as Verizon) to adopt Android, and more importantly, to forgo competing with Google’s Play Store at that time. Google then shut down the Android ecosystem and relevant Android App Distribution Market as soon as it was feasible to do so, effectively trapping consumers and app developers in that ecosystem and removing any effective competition by (among other things) requiring manufacturers and operators to enter into various contractual and other restraints.
Arizona also alleges that Google engaged in conduct in violation of consumer protection laws by falsely representing that it would keep Android “open” and by issuing misleading warnings to consumers– that directly downloading an app would lead to disastrous consequences for the user and their device which also enhanced and protected Google’s monopoly position.
The complaint was filed in the U.S. District Court for the Northern District of California.